Sapura Energy loss narrows

President and group chief executive officer Tan Sri Shahril Shamsuddin said the company aims to return to the black when the utilisation of its drilling and E&C business crosses the 70% mark.

PETALING JAYA: Sapura Energy Bhd narrowed its net loss by over 88% in the third quarter ended Oct 31, led by higher top line and a net foreign exchange gain of RM56.16mil.

However, the integrated oil and gas (O&G) services provider continued its losing streak for the fifth consecutive quarter as it booked a net loss of RM31.09mil. For comparison, the group recorded a net loss of RM274.41mil in the previous year’s corresponding quarter.

Sapura Energy’s revenue in the three-month period rose by 17.36% year-on-year (y-o-y) to RM1.5bil, mainly attributable to the higher revenue contribution from the engineering and construction (E&C) as well as the exploration and production business segments.

The group did not declare any dividend for the quarter in review. Loss per share was 0.52 sen.

According to president and group chief executive officer Tan Sri Shahril Shamsuddin, Sapura Energy has been seeing an upward trend in all business segments, particularly the E&C division, driven by an increase in global investments and activities.

“As our order book grows, revenue will move up in tandem with project completion from commencement to book recognition,” he said.

Cumulatively, for the first nine months of financial year 2019, Sapura Energy saw an increase in net loss to RM292.88mil, up from RM217.95mil a year earlier.

The bottom line took a hit after the group’s revenue fell by almost 19% y-o-y to RM3.82bil. This was primarily due to lower revenue from the E&C and drilling business segments.

Commenting on its prospects, Sapura Energy said the O&G industry’s rising capital spending and the resurgence in activities are expected to fuel the group’s growth moving forward.

“With the increasing activities, stronger balance sheet and encouraging potential growth prospects, the board is optimistic that the group will continue to improve its performance,” it said.

Meanwhile, in a separate Bursa Malaysia filing, it was announced that Sapura Energy and its consortium partner had bagged a RM3bil contract from India’s state-owned Oil and Natural Gas Corp (ONGC) to build an offshore process platform on the east coast of India.

Sapura Energy said its wholly-owned unit Sapura Fabrication Sdn Bhd will undertake the engineering, procurement, construction, installation and commissioning works together with its consortium partner, Afcons Infrastructure Ltd, for the development of the KG-DWN 98/2 NELP block.

Afcons is the construction arm of the Indian conglomerate Shapoorji Pallonji Group.

Based on Sapura Fabrication’s 48.33% stake in the consortium, the deal is expected to translate to RM1.47bil in contract value. The group expected works to be completed by January 2021.

“The contract announced herein will have no effect on the issued capital of the company and is expected to contribute positively towards the earnings of Sapura Energy for the financial year ending Jan 31, 2019, and for the financial period thereafter within the duration of the contract.

“The new contract win enhances the company’s presence in the growing market and Sapura Energy is pleased to continue its contribution to India’s O&G industry and in helping to meet the country’s increasing energy demand.

“The project is an opportunity for Sapura Energy to participate in a key development for ONGC, leveraging on the company’s established deepwater knowledge and capabilities,” the group said.

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